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Category Archives: Workers’ Compensation

Many of my clients tell me, with fear in their voice, that they have one or more bills set to automatically pull from their bank accounts, but they have no money in the bank to cover the payment and will face overdraft charges if the payment pulls from their account. Typically, these are car payments, as many auto loan lenders offer lower rates if the purchaser agrees to set up automatic payments. Some businesses, like your local gym, may require auto-pay agreements. It seems like a good idea, when one is working.

Add an injury or disability into the mix, though, and it can become your worst nightmare. Even under the best circumstances, an injured worker that is receiving their time loss compensation benefits – often 60 – 65% of pre-injury wages, or a much smaller percentage if they were a high wage earner and have hit the ceiling of compensation rates – will most certainly not be getting paid on the same schedule as their payroll department was using. Juggling bills is hard enough with decreased income levels, but the forfeiture of control over the ebb and flow of funds in your bank account can put you in financial peril after an injury.

If you find yourself in the scenario I have described, try contacting your lender or service provider to inquire about making changes to the agreement you signed – or terminating the agreement, if needed – to at least make the drafts from your account occur on a better schedule but, preferably, to take back control of the payments. You should maintain the ability to make payments to creditors on your own schedule when funds are available. The auto-draft agreements are a contractual agreement, though, and you may need legal assistance to alter them. In my experience, though, lenders are usually able to work with their clients to maintain the integrity of their loans. In the long run, repayment is their goal and facilitating your ability to manage your payments is in their best interest, too.

Medical coverage is a topic on everyone’s mind. Obamacare, while controversial, has started a real dialogue in this country regarding health care. Regardless of whether you are in favor of the current law, most Americans want affordable health care for themselves and their families.

Many employers pay for a substantial amount of their workers’ premiums as a benefit to them, and take this into consideration when making salary decisions due to the high cost, thereby leaving workers to pay for all or some of their medical coverage. Sometimes insurers pay for benefits that are not their responsibility because the proper entity refuses to pay. This is known as cost shifting. As a practitioner in the field of Workers’ Compensation, this idea of cost shifting has become an all too common occurrence.

By way of background, as a result of social reform, most states enacted some form of Workers’ Compensation legislation in the early 20th Century. In exchange for timely payment of medical and indemnity benefits, workers gave up the right to sue their employers. In 2007 in New York, there was a series of further reforms that led to compromise between labor groups, the insurance industry and the Business Counsel. There was an increase in the amount of weekly benefits to injured workers to conform with the State average weekly wage (now a maximum of approximately $800 per week) in exchange for a limit on the amount of weeks an injured worker is entitled to receive these benefits. Additionally, medical treatment guidelines have been introduced with the premise that they would streamline costs and get injured workers faster and more effective medical care. These guidelines are based upon the principles of Evidence Based Medicine (EBM), which is the use of clinical trials and data to determine whether a specific treatment should be recommended for a specific diagnosis. It is sometimes referred to as “cookbook” treatment.

In New York, the Court of Appeals recently ruled by a 4-3 margin that any treatment not specifically included and pre-authorized is presumptively unnecessary. In other words, if a treatment requested is not within the medical treatment guidelines, it is denied. This takes the decision making out of the hands of the treating physician who is really in the best position to determine what treatment would be most beneficial for patients. In order to overcome this presumption, the doctor now must engage in what has been seen in most cases as an exercise in futility to request a variance to overcome this presumption.

The New York Committee for Occupational Safety and Health (NYCOSH) reported that the New York State Workers’ Compensation Board received 202,643 variance requests in the first 10 months the guidelines were implemented. A quarter of the requests were rejected by the Board immediately. The rest can lead to protracted litigation. As a result, in many instances injured workers will now shift the cost to another party, such as their own private insurance, Medicare or even worse, pay for the treatment out of pocket. It is the path of least resistance. We all pay an additional price for medical costs borne by group health insurance carriers, Medicaid, and Medicare that should in fact be paid by Worker’s Compensation insurers. This cost shifting may increase Workers’ Compensation insurance profits, but it hurts both the employers’ and the employees’ bottom line. Injured workers don’t stop needing treatment just because their medical claim is denied. Someone has to pay for the cost of lost time and medical treatment. It is time that the proper party step up and take responsibility.

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

Have you noticed a suspicious vehicle lurking in your neighborhood lately, or is there a stranger that seems to be everywhere you go? If you have an active workers’ compensation claim, then you may not be imaging things. More and more, we are seeing insurance companies willing to spend thousands of dollars to hire private investigators to conduct clandestine surveillance of an injured worker’s daily activities and documenting these activities with video cameras. This type of surveillance often comes as a shock to our clients.

When these situations arise, the question we hear most often is, “Can they do that? Is this legal?” The answer is yes. Private investigators may photograph or video people in their private residences so long as they are clearly visible to the general public and there is no expectation of privacy. They can also conduct a full background investigation and obtain information about any other claims you made for personal injuries or if you have ever been charged with a crime.

While there are honest private investigators in the field, there are also those who will cheat. One investigator deflated an injured worker’s tire and then videotaped the person “working” to fix the flat tire. Another investigator reported talking on the phone to someone who told him that an injured worker was working while also receiving workers’ compensation benefits. A follow up done by our firm proved that the person with whom the investigator claimed to have talked has a serious hearing impairment and could not use the telephone.

Injured workers need to be aware that surveillance can happen in any case. It has become part of the workers’ compensation system. By the way, if you do notice a suspicious car parked near your home, call the police.

Today’s post comes from guest author Thomas Domer, from The Domer Law Firm.

Today I taught worker’s compensation “Offsets” in the course I teach at Marquette Law School. The students were aghast at the amount of “cost shifting” that occurs in worker’s compensation: that is, medical costs paid by a variety of sources other than worker’s compensation for medical expenses that should be paid by the worker’s compensation insurer.

We all pay an additional price for medical costs borne by group health insurance carriers, Medicaid, and Medicare that should in fact be paid by worker’s compensation insurers. This “cost shifting” occurs in two significant ways. First, if the claim is denied by the worker’s compensation insurance carrier, medical costs may be paid by the worker’s group health insurance or other private insurance company, or through State Medicaid or federal Medicare programs (the cost of which we all pay in taxes). When those claims are settled, the worker’s compensation insurer routinely saves money by reduced negotiated payment contracts with medical providers, between the provider and the group health carrier, Medicare, or Medicaid (rather than the “full boat” payments that should be paid by the worker’s compensation insurer). If the treatment is deemed work-related after a hearing, the worker’s compensation insurer will pay the other insurer, but at reduced rates.

Second, since only about one in ten cases involves any kind of litigation, workers who are not represented routinely bill their group or other insurance carrier for medical treatment that should be paid by worker’s compensation. Bolstering this notion is a recent article in the Insurance Journal. In the article Jonathan Gruber, Professor of Economics at M.I.T. was quoted indicating that worker’s compensation carriers should see fewer claims as a result of more Americans obtaining health insurance under the Affordable Care Act. He said “As more people have health insurance there is less need for them to have injuries covered by worker’s compensation and this should lower worker’s compensation costs.” Nowhere in this analysis is the notion that the appropriate payor for a worker’s compensation injury should be a worker’s compensation insurer, not health insurance premiums (which are shared by us all) nor Medicare and Medicaid (again shared by us all in the form of taxes).

Workers hurt on the job should have their medical treatment paid by the worker’s compensation insurer, who has received a premium for that risk from the worker’s employer. Cost shifting may increase worker’s compensation profits, but it hurts both the employers’ and the employees’ bottom line.

Today’s post comes from guest author Leonard Jernigan, from The Jernigan Law Firm.

Number

Value

Non-Employee Fraud Cases

9

$

74,876,000.00

Employee Fraud Cases

1

$

450,000.00

Total

$

75,326,000.00

Five of the top ten fraud cases in 2014 are from California. The other five cases are from Florida, Texas, Arizona, Washington and Georgia. As usual, non-employee fraud cases dominated the list and the dollar amounts are staggering, led by the $36 million over-billing case out of southern California. An emerging issue is the misclassification of workers, and we will likely see more of these cases in 2015 as enforcement steps up in this area.

The owners of Aspen Medical Resources were indicted in on 49 felony counts of fraud.

The owners of Aspen Medical Resources had all their assets seized and put into receivership by the Orange County District Attorney. They were indicted in on 49 felony counts of fraudulent overbilling of $36 million for hot-cold physical therapy machines. Although these machines retail between $250 and $500 Aspen often billed Southern California workers’ compensation claims departments thousands of dollars each time a machine was rented.

Fifteen doctors, pharmacists and other medical professionals in Southern California were charged in a $25 million workers’ compensation scam which was linked to the death of a baby. Prosecutors alleged insurance fraud and conspiracy in the 44 count indictment which detailed that the head of a workers’ compensation claims management firm hired pharmacists to produce a pain-relief cream and then gave kickbacks to the doctors that prescribed it and conspired to submit phony claims. A 5-month old boy ate the cream and died when his mother, who was using the prescribed cream for back and knee pain, allowed her son to suck her fingers to sooth him. The next morning he was found dead and tests showed he had ingested lethal amounts of drugs in this cream.

Lowe’s misclassified its installers as independent contractors, rather than employees.

Over 4,000 “Lowe’s professionals” in California are members of a class action alleging that Lowe’s misclassified its installers as independent contractors, rather than employees, thus depriving them of a variety of employee benefits, from workers’ compensation insurance coverage to 401(k) plan participation. Lowe’s, without admitting liability, recently settled the case after mediation for a sum that could be as much as $6.5 million. The plaintiffs claimed that Lowe’s retained and exercised control over their work by requiring them to identify themselves as working for Lowe’s, wear Lowe’s hats and shirts, and attend training by Lowe’s.

Five owners (Sabas Trujilo, Lucia Trujilo, Rick Trujilo, Laura Fitzpatrick and Alex Trujilo), operators and employees of a Corona, California based paving company are facing criminal charges for alleged wage theft, premium fraud, workers’ compensation and payroll fraud. The Riverside County District Attorney’s Office alleges that the individuals’ criminal actions enabled them to illegally obtain about $4 million. After launching an investigation, the state obtained search warrants for both companies, seizing computers and bank, payroll and other documents. The state conducted several wage audits on several hundred projects, which ultimately led to the filing of criminal charges.

Arturo Santos Zuniga, who also went by the name David Hernandez, was busted for paying laborers in cash to avoid paying workers’ compensation insurance premiums. Zuniga paid a North Lauderdale man to create and insure a fake or “shell” company, Behar Services Incorporated, and “rented” out insurance certificates to uninsured subcontractors in South Florida. Payments to the uninsured subcontractors were made through checks to the fake company, which were then cashed at check cashing stores. Behar Services Incorporated got its insurance policy by saying it had 10 employees doing carpentry and office work with an annual payroll of $210,000. The annual premium was about $26,500. Law enforcement financial reports show that just in the months from July to October, more than $7.3 million had been cashed out at check cashing stores to Behar Services Incorporated and/or the North Lauderdale man who started the company. A $7.3 million payroll would have cost more than $1 million more than the existing policy. No estimate of lost tax revenue was given.

Howard Douglas Whiddon was ordered to pay $806,000 in restitution to workers’ compensation insurer Texas Mutual Insurance Co. after pleading guilty to workers’ comp fraud-related charges. He intentionally misrepresented the payroll of a related company, thus lowering his premiums. Mr. Whiddon was sentenced by a Travis County, Texas court to 10 years of deferred adjudication and 160 hours of community service.

Paul Johnson Drywall Inc. classified its workers as “members/owners” instead of employees, which stripped them of workers’ compensation and other protections afforded to employees. The owner, Robert Cole Johnson agreed to take concrete steps to ensure that misclassification of its workforce does not occur again and to pay $556,000.00 in overtime back wages and liquidated damages to at least 445 current and former employees. The employer also agreed to pay $44,000.00 in civil monetary penalties. Investigators found that the drywall contractor violated the Fair Labor Standards Act overtime and record-keeping provisions.

Thomas Kauzlarich, the owner of Summit Drywall, Inc. was ordered to pay $550,000 in overtime back wages and liquidated damages to 384 current and former employees. An investigation showed that the company violated the Fair Labor Standards Act’s overtime and record-keeping provisions from October 15, 2009 to April 15, 2013. The article did not report the amount of reduced workers’ compensation premiums paid.

A VA nurse from Glenwood, GA, will serve five years in prison for mail fraud and mailing fraudulent claims.[/caption] Loretta Smith, a VA nurse from Glenwood, GA, will serve five years in prison and must repay $450,000.00 in federal funds by filing bogus workers’ compensation claims, pleading guilty to two counts of mail fraud in the mailing of fraudulent claims, in which she received more than $450,000.00. She agreed to forfeit the equivalent of $454,740.06 in cash, real estate and other property. She was also sentenced to three years probation after her release.

10. (California) Drywall Company Owners Arraigned on $420,000 in Fraud Charges (12/11/14) The owners of a defunct drywall company, National Drywall in San Bernardino, CA, were arraigned on charges that they defrauded their workers’ compensation insurance carrier of $260,000.00 and stole $160,000.00 from their workers.

Stephen Nagy was the former president of Hillsboro-based S&S Drywall Assemblies. The IRS assessed the company $481,519 in federal employment taxes, penalties and interest between June 2009 and September 2010. Nagy met with the IRS and chose not to comply with the payment plan and engaged in a variety of interrelated fraudulent schemes to evade the payment of the delinquent payroll taxes. Nagy intimidated, manipulated, and threatened the loss of much needed jobs to gain the cooperation of his employees. Special agents of the IRS learned that Nagy had transferred all of S&S Drywall Assemblies income, contracts, receivables and assets to ASM Drywall, Inc. a shell company he created and placed in his sister’s name. The Oregon attorney general prosecuted Nagy in 2011 on allegations of criminal anti-trust and racketeering. He was sentenced to 30 days in jail and five years of supervised probation.

Here’s why people should support candidates who will protect workers’ rights. Understand that the ongoing workers’ compensation issues faced by state legislatures are not going away, so state legislatures are the front lines when it comes to making sure workers’ compensation systems are not diluted even more for injured workers and their loved ones.

Here’s some background. Over 100 years ago, workers’ compensation law was developed across the United States. Nebraska was actually one of the pioneering states, back when we were more progressive. Workers’ compensation was viewed as the “Grand Bargain,” with several presumptions on how the system should work. A January 2014 LexisNexis Legal News Room Workers Compensation Law blog post addresses these presumptions. The blog itself is a respected neutral source on workers’ compensation issues.

While employers and insurance companies are chipping away at the protection workers’ compensation systems offer to injured workers and their loved ones through stalling tactics such as disputing if an injury happened at work or just straight out refusing coverage, those same interests are bending the ears of each state’s politicians to further erode the “Grand Bargain.”

Year in and year out, business and insurance groups cause a large number of bills to be filed that take away benefits from workers or make it more difficult for workers to obtain benefits or take control of their treatment for work injuries.

A recent study’s results, written in the same blog by the same author, reinforces what many injured workers, their loved ones, and their attorneys already know: essentially that workers in New Mexico (and I would argue that this is easily applicable to injured workers in many states) are no longer benefitting from the “Grand Bargain.”

The Grand Bargain Is Out of Equilibrium

“An important part of the ‘grand bargain’ between employers and employees within the workers’ compensation arena is the idea that just as the wear and tear on an employer’s machinery ought to be reflected in the price of the employer’s goods or services, so also should the wear and tear on the employer’s work force. A product’s price should reflect the total cost of production, including the costs associated with work-related injuries and illnesses. The Seabury study adds weight to the argument that the grand bargain is out of equilibrium, that workers’ compensation benefits do not adequately replace what a worker loses through his or her injury, that the physical and economic costs associated with work-related injuries and illnesses are not being fully addressed, and that the injured worker is at least partially subsidizing the overall cost of America’s goods and services with his or her lost income.”

The bottom line from this respected author is that workers’ compensation benefits should not be reduced, made more difficult to obtain, etc., when workers who get injured already make less money over a 10-year period of time than workers who aren’t injured.

So let’s elect legislators who will both restore and support the “Grand Bargain” for injured workers and their loved ones.

I have been carefully following the Ebola outbreak, both the cases in the United States and those around the world. I am saddened to see anyone suffer from this horrible virus, but the preventable infections, including the infection of multiple health care workers in Dallas, are particularly alarming. Health care workers are on the front lines of our fight against this deadly disease and their bravery should be recognized. They are an infected patient’s first point of contact with a hospital and are in close contact with infected patients during their struggle, often having to work with blood and bodily fluids, the primary methods of transmittal.

The lack of preparation on the part of some of our healthcare institutions has been extensively covered in the news. According to reports from Dallas, the hospital where the first patient was admitted had a complete absence of protocols for caring for patients with Ebola. This lack of preparation has put thousands of people at risk of infection and at least potentially contributed to in the spread of the outbreak in the United States from one patient to at least three. But the failure lies not only with local hospitals, it is also due to a slow and uncoordinated effort by our Federal government.

Even if existing protocols had been followed in Dallas, Dr. Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, admits that the Federal guidelines are inadequate. The Centers for Disease Control is revising its protocol for the treatment of Ebola patients, but the recommended steps will take time to fully implement. The CDC’s current protocol was originally developed by the World Health Organization for the treatment of infected patients in facilities in rural Africa, not in busy American hospitals.

Even before the comprehensive protocols are developed and implemented, our health care workers should to be trained on the basics and given the proper equipment for their own protection. For example, nurses must be trained in and practice the complicated and tedious getting in and out of hazmat suits. Training must happen quickly, as the situation could become dire – as of today we only have 4 hospitals in the United States that are fully equipped with a pre-trained staff. Those hospitals can treat a total of 9 Ebola patients. We are just not equipped for a large domestic Ebola outbreak.

Further, as this CNN video below explains, health care workers are not the only ones at risk. Because Ebola can survive on surfaces like doorknobs, tables and fabrics long after an infected person has touched them, many locations may need to be disinfected in the coming weeks as the true extent of the outbreak becomes known. Just last week a group of airline cabin cleaners at LaGuardia Airport went on strike because of the possible health risks of cleaning surfaces touched by Ebola-infected passengers. Like health care workers, the workers who are in charge of the disinfection process should follow the Federal guidelines once they are released.

In addition to the possibility of Ebola infection, working in extraordinarily difficult conditions is highly stressful and the complicated new procedures could lead to injury. We urge all workers to be extremely cautious when training on and implementing new procedures.

If you are a Health Care worker involved in an accident or occupational injury, please consult us regarding your financial and medical rights. Workers are entitled to know about their rights under the law, whether it is from a traumatic injury or from occupational conditions due to repetitive activity at work over time. There are deadlines to filing a claim so please contact Pasternack, Tilker, Ziegler, Walsh, Stanton & Romano, LLP as soon as you can.

Last week marked the 25th anniversary of Workers’ Memorial Day – a day set aside to remember those who were injured or died on the job. President Barack Obama issued a proclamation in which he noted “we must never accept that injury, illness, or death is the cost of doing business.” While we have come a long way from the tragedy of the Triangle Shirtwaist Factory Fire in which 146 workers were killed while trapped inside a garment factory due to locked doors and a collapsed fire escape, it is clear that we haven’t come far enough.

Recently, the New York Committee for Occupational Safety and Health (NYCOSH) issued a report on Workplace Safety in the Construction Industry. The report was frightening. Just last year alone, 23 construction workers were killed while performing their jobs. According to the NYCOSH report, many of these construction deaths could have been prevented had proper safety precautions been taken. The report noted that the Occupational Safety and Health Administration (OSHA), established by the U.S. Congress to enforce safety practices, is understaffed, thereby leaving many worksites uninspected. Also, penalties for infractions are far too low to deter some employers from not implementing proper safety precautions.

Many of us in the workforce thankfully are not engaged in hazardous employment, but there are dangers often not anticipated. According to the U.S. Department of Labor, overexertion due to lifting or bending the body was the leading cause of workplace injury in New York. These types of injuries are seen in health care, food services, educational services, retail, professional and business services. In short, most work-related injuries are not confined to the construction industry but rather are occurring in every industry.

What should you do to protect yourself from many of the common injuries? First and foremost, know exactly what your job duties entail. Find out how to properly perform your job before you engage in your work.

Make sure your workspace is maintained in a neat and orderly way so that you don’t trip on wires or boxes, or slip on papers, or food or oil in the food service industry.

If your office has a break room or kitchen, make sure spills are cleaned up immediately.

Office supplies should be stored properly so they don’t fall on you or your coworkers.

Know the proper way to lift heavy items to protect your back

Make sure your computer workstation allows you to maintain adequate posture so you don’t put undue strain on your arms, hands and back

Have an ergonomic keyboard that can help reduce injuries to your wrists

If you are not trained as a technician, do not try to fix equipment; bring in a repairman

Make sure you are instructed on what to do in case of a fire; know where the exits are and make sure your company engages in fire drills

If all else fails and an accident does occur, know the proper procedure for reporting an injury. Workplace safety is crucial. It will save employers money as injuries result in loss of manpower and higher insurance rates, but most importantly, workplace safety will save lives.

—

Catherine M. Stanton is a senior partner in the law firm of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP. She focuses on the area of Workers’ Compensation, having helped thousands of injured workers navigate a highly complex system and obtain all the benefits to which they were entitled. Ms. Stanton has been honored as a New York Super Lawyer, is the past president of the New York Workers’ Compensation Bar Association, the immediate past president of the Workers’ Injury Law and Advocacy Group, and is an officer in several organizations dedicated to injured workers and their families. She can be reached at 800.692.3717.

About Our Team

This blog is written by the attorneys of Pasternack Tilker Ziegler Walsh Stanton & Romano, LLP, as well as our distinguished colleagues from across the country. Our firm is a full service Law Firm that has been representing the injured person and worker for over 80 years. We have individual departments and specialists concentrating in serious personal injury cases, workers’ compensation claims, occupational disease claims, social security claims and various other matters such as estate planning and state and municipal disability claims. Our attorneys are selected as Super Lawyer magazine Super Lawyers year after year. In 2009 and 2010 our firm had 100% of the Super Lawyers named in Workers’ Compensation in the New York metro area. For more information about our firm and our attorneys, please visit our firm website.

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